Most people don’t fall
into a pile of debt overnight. It takes time
to rack up credit card bills and get behind
in house payments. The key is managing your
spending habits before things get out of
control in the first place.
Take a look at your spending habits. Each of us is either a spender or a
saver. There are distinct characteristics for both types of people.
Spenders love to buy things. They go with their first impressions. Impulse
buying is their specialty. Not allowing time to think about a purchase
before making it leaves them with stuff that they could have done without.
Spenders live for today with little thought to the future. Why save when you
can be happy now?
Savers are on the opposite end of the spectrum. They think about the future
all the time. In fact, they give more thought to the future than they do to
the present. They sacrifice to the point of piety. Enjoyment of life is not
in their equation. The sad part is that they may not even enjoy themselves
when they reach the point in life that they have been saving for. A penny
saved is a penny earned.
Striking a balance between the two polar opposites is the best character
trait to possess. While we should think about the future, we mustn’t obsess
to the point that the present holds no meaning other than to service the
future. Money is a means to live life to the fullest, but not the only one.
Start with last month’s purchases. Look at bank statements, credit card
statements, and ATM receipts. The ATM machine is usually the fastest way to
overspend. You put in your card and it spits money out at you. Most people
don’t even ask for a receipt. At least if you had one, the amount could be
recorded later when you returned home.
A budget is the best way to keep an eye on your money. Know what you have
allotted to each category and stick to it. After the first few months you
will be able to fine tune the line item amounts. Don’t cut yourself to the
bone, thus making a budget hard to follow. On the other hand, don’t give
yourself so much leeway that you go over budget every month.
Do you need that new sweater? Check the closet. There may be a clothing item
or two that still fits and looks good. Visiting the mall just to “window
shop” is too strong a temptation for the big spender. Instead of walking out
empty-handed, they’ll pick up a few things that were on sale.
If ATM’s or debit cards are a problem, carry cash. Make one withdrawal a
week for groceries, gas, and other incidentals. When the money is gone,
that’s it. Writing checks for bills encourages you to track them in a ledger
or electronically. Using cash may seem antiquated in today’s society, but it
is still the best way to keep track of your spending. Receipts can be kept
until the end of the month and then reconciled.
Taking the time to see where your money is actually going can help to curb
those spending habits. Try to spend a little and save a lot each month. Hold
out for those things that you want to see if you still want them a month or
two from now when you have saved up the money.
Recommended Reading
Debt Free
In Three
Thanks to this guide complete with
worksheet and personal coaching, my family
and I will be complete debt free in 42
months (including paying our house mortgage
in full). The principles taught in this
program are simple, yet incredibly powerful.
See for yourself.
Click here to get Debt Free in 3 to 5 years. |
